Name change among many sought for Railroad Commission of Texas in Sunset process

CORPUS CHRISTI - Adopting a name that accurately reflects its core duties is a good start in taking the Railroad Commission of Texas to the next level of transparency and effectiveness in its watchdog role over the state's booming oil and gas industry, a panel of lawmakers and private citizens has said.

A new name is one of several changes suggested for the state's oldest agency as part of its review under the Sunset process, the legislative exercise under which every state agency is placed in an effort to cut costs, increase productivity or, if necessary, shutter one.

The commission, whose name would become the Texas Energy Resources Commission if the Legislature adopts suggested changes, employs about 700 people who work in 11 field offices from which they inspect and monitor pipelines and oil and natural gas production facilities, issue permits and ensure compliance with environmental and safety regulations.

The commission, headed by three elected commissioners who serve staggered, six-year terms, in 2012 operated on about $75 million, more than 60 percent of which comes from fees and surcharges collected from the oil and gas industry. The rest comes in appropriations from the Texas Legislature and a mix of federal and state dedicated funds.

Changing the name to something more in line with its mission would bring clarity at a time when it is most needed in its 121-year history, the Sunset Advisory Commission suggested.

"While clearly a boon for Texas' economy, questions have been raised about the impact and safety of new drilling technologies ... answering these questions requires a strong and effective regulatory agency that is proactive in educating the public, sets clear and predictable rules and fairly and objectively ensures those rules are followed," wrote the 12-member commission in a 76-page report to the 83rd Legislature.

The Sunset Advisory Commission is a panel of five state representatives, five state senators and two private citizens — one appointed by the Speaker of the House and one by the lieutenant governor.

The commission also adopted recommendations calling for more protections for property owners affected by forced pooling, a commission fiat typically applied to horizontal drilling in oil and gas formations that cross multiple mineral interests, some of which the operator may not have rights to drill.

State Rep. J.M. Lozano, whose 43rd House District includes Bee County in the heart of the Eagle Ford Shale oil and gas play, said the recommendation, if adopted, would balance individual rights with regional interests.

Lozano, who last week announced he has been asked to serve as vice chairman of the House Committee on Energy and Natural Resources, said constituents often complain of stonewalling by land owners, who, in the hope of driving up prices, will hold out so that companies are forced to seek the forced pooling option.

"In the end, no one's getting anything," said Lozano, R-Kingsville, on Wednesday. "The state loses revenue, the county loses revenue and several landowners may suffer because of one."

The commission also recommended protections for property owners affected by overrides on spacing requirements that dictate minimum distances between wells.

The commission report to the Legislature, which either must adopt the changes in whole or in part, abandon them or modify them, also includes removing the $20 million annual cap on the Oil and Gas Regulation and Cleanup fund as well as adopt a pipeline permit fee that would raise money needed for intrastate pipeline safety enforcement programs.

The Railroad Commission in 2012 flagged more than 2,700 violations during more than 3,300 pipeline inspections of 170,000 miles of intrastate pipelines, according to data submitted during the Sunset review process.

The report also suggests expanding the commission's authority to penalize excavators and pipeline operators who fail to comply with Texas' damage prevention violations that arise from inspections of the 44,000 miles of interstate pipelines operating within the state.

Also adopted were recommendations that would limit campaign fundraising periods for sitting Railroad commissioners, or candidates, to within 18 months of an election date and place tighter restrictions on campaign contributions from parties involved in contested cases over which commissioners have jurisdiction.

All Sunset recommendations are in the hands of the Senate and House, where members are working with Sunset Commission staff and legislative counsel to draft legislation that will be forwarded to applicable committees in both houses, which will hold public hearings, Sunset Commission Executive Director Ken Levine said Tuesday.